For all his low-profile management style, Reuters' chief executive has presided over a period of phenomenal growth. Yet his downbeat manner, says Andrew Davidson, is causing some to question how long the success story can continue.
Peter Job, chief executive of Reuters, is not a man who much likes talking about himself. 'My God!' he says, after asking how long this piece is going to be. '3,000 words?' He rubs his chin as a look of genuine discomfort crosses his jowly features. 'Whoever wants to read that much about me?'
Well, the list is pretty long, really. You could start with Reuters' 50,000 shareholders. Then there are the giant finance houses which depend on Reuters' state-of-the-art computer equipment and its non-stop flow of information. Then, of course, there are the huge media organisations that rely on Reuters' up-to-the-minute reporting of international affairs. There are even Reuters' 14,000 staff working out of 160 countries worldwide. In fact, you would have to lead a pretty cloistered existence to think that stewardship of a £2.9 billion-turnover, publicly-owned, leading-edge media and technology giant is something that can be carried out incognito. Wouldn't you?
Ah, but this is Reuters. You only have to get a whiff of the atmosphere on the senior executive floor at the company's refurbished Fleet Street head office in London to realise what an odd beast it is. Everything is quiet. Exquisite Old Master drawings hang portentously against rich brown Lutyens wood panelling. Dark-suited executives whisper sombrely to each other in little groups. By the rotunda outside Job's office, a burly young man in uniform stands, hands clasped behind his back, looking at the ceiling. And so you wait for Job's door to open, feeling like you are in line for an audience with the Pope. If a couple of cardinals and a puff of white smoke had come out first, I would not have been at all surprised.
In short, it doesn't feel like a dynamic news organisation that has expanded so successfully into the infotech age that it has left its rivals floundering. Instead, it feels old, established and safe - all of which it is as well. Nearly 140 years old, the firm still carries the name of its German Jewish emigre founder, Paul Julius Reuter, and, because of a golden share arrangement with a protective trust, it is very definitely safe from takeover. These are all curious paradoxes: dynamic company, yet steeped in tradition, with a genius for technology but an old-fashioned reputation for looking after its own. Job himself, as befits a man who pronounces his name after an Old Testament patriarch famed for patience, has never worked anywhere else in his life since leaving Oxford 35 years ago and, despite Reuters' huge success, is barely known by many in the City and industry.
So, does he lead a cloistered existence? Job, 56, rubs his egg-like dome of a forehead contemplatively. He looks tall and broad, heavy in the waist, and a bit uneasy. He greets every question with a reflective pause, and for the really difficult ones - the ones about himself - a little 'hmm'. Colleagues say that this is not because he is unsure but simply because he always finds encounters with the press difficult. As a former journalist himself, he is prone to wonder where each question is leading. Inside the organisation, where he has been chief executive for six years, he is rather less hesitant. 'Cautious' and 'consensual' are the words used by other Reuters executives.
Yet the best perspective on Job probably comes from the big company veterans on Reuters' board. Just look at his achievements in what is a frighteningly complex and fast-moving market, they say. 'Peter is really strong in his feel for the business, very good at judging long-term trends and he stands out from other chief executives in his capacity to gaze unflinchingly at the problems in the business,' says his chairman Sir Christopher Hogg, the former chief executive of Courtaulds. Bob Bauman, chairman of BAe and another Reuters director, says Job has also been brilliant at creating a climate of innovation in the company. 'He is really bright at thinking through where the company is going, and very change-oriented,' says Bauman. 'I think I probably am a cautious manager,' says Job eventually.
Is that just his nature or is it Reuters' as well? 'Hmm,' he says. A moment passes while he studies the table between us. Then he continues. 'Given that the company has been around since 1851, it couldn't really have happened unless there was fairly cautious attention to the basic survival of what it was all about. Not many companies have been around that long. And basically if it has been around that long, you don't want to do something that will cause it not to be around in 2051. And it weighs heavily on you that you are trying to create a continuous organisation that has survival capability, and that inducement is absolutely important.'
So important, perhaps, that it does occasionally make the organisation appear rather more cumbersome that it really is. Take its image. Reuters is still best known as a news agency providing stories for newspapers and television, an image completely out of line with its history (it was set up to provide stock price information to budding Victorian capitalists) and somewhat out of date with reality. Certainly, before and after the second world war, its news-gathering arm was its most prominent division. Now it is tiny in comparison with the rest of Reuters. Over 90% of the company's revenue, around £2.7 billion, comes from providing financial information and transaction equipment - what it calls 'financial products' - for the world's money markets.
But why should it worry about image? Its pre-tax profit growth over the last decade or so has been little short of astounding. From £94 million in 1985, £130 million in 1986, £179 million in 1987, £208 million, £283 million, £320 million, £340 million, £383 million, £440 million, £510 million, £599 million, to £701 million in 1996. Its revenue growth is no less impressive - turnover has grown sixfold since 1985. By last November, Reuters had become the London Stock Exchange's 12th most valuable company, with a market cap of £12 billion. With figures like that, making sure the world understands its business becomes a secondary consideration.
Key to its success has been Reuters' ability to position itself among the industry leaders in the IT revolution. Critically, says Job, from the '60s onwards, it has used the advent of the computer, harnessed to new forms of communication lines and databases, to generate the sort of cash-flows it needs to prop up its increasingly expensive news-gathering operation and plough back more into research and development. The rise of Reuters' infotech business has been well documented but it is pertinent to note that it is a boat that Job, for one, thinks the company could easily have missed.
'You have to look back and admire the previous generation of management,' he says. 'It's easy to sit on the crown jewels in these matters. What was perceived by them then was that America was generating huge advances in technology but was oblivious to the importance of the external market. Reuters had a good idea of the importance of the external market but it needed to license the technology.' In 1964 it introduced Stockmaster, the first international computerised information retrieval system for stock prices. In 1973, two years after the major western industrialised companies abandoned fixed exchange rates, it launched Reuters Monitor, which offered customers screen-based displays of real-time foreign exchange rates.
People forget, Job says, that technology is what the company has always been about, right from the days when its founder set up his two-room office just outside the Stock Exchange and started transmitting prices between London and Paris via the first undersea cable. The trick is to keep abreast of what's new and work out what benefits can be passed on to customers. It has worked so well for Reuters that, while it faces a host of rivals working in different markets - Bloomberg and Dow Jones in financial information, for example, Associated Press and Agence France Presse in the media - few seem to operate with the same breadth.
It's all very different from the company Job joined in the early '60s.
Then, as a trainee journalist, he found the organisation 'poor but honest'.
He didn't really want to be a journalist, he says, he just wanted to travel.
It seemed the logical thing to do after reading modern languages at Oxford.
'I followed the classic route like a migrating reindeer,' he says with a smile. His upbringing in Devon was standard middle-class stuff, with the exception that his father had died in the war, when Job was only three.
Job - he says the surname is probably a contraction of Joseph, like Jupp is in Germany - was educated at Clifton College in Bristol. He sat in the same French class as John Cleese, who, he remembers, used to do the most amazing impersonations of Hitler on the fire escape above the school dining room.
You suspect Job, who lists the theatre as one of his interests in Who's Who, probably envied Cleese his performing skills in those early years.
When Job started at Reuters, he was painfully shy, and nobody took much notice of him. Eventually he was posted to Reuters' bureau in India, and he got stuck in. Tough postings to Kuala Lumpur and Jakarta followed.
He was, by all accounts, a resourceful and efficient copy filer. Back in London, that efficiency and his interest in economics got him shunted into the business side of the operation. There was no real real career plan, he says. Reuters simply got its managers from where it could.
First he was assigned to a project providing information to the World Bank. Later, he was sent to Buenos Aires to sort out the loss-making Latin American bureau, and from there to management posts in Asia, the Middle East and Africa. What he was good at, say those who have known him a long time, was not just cutting costs, but thinking of creative ways to expand the business by working closely with customers - 'He's never happier than when he's in a room full of customers,' says one colleague wryly. 'He has always devoted a huge amount of time to that.' By 1988, he was MD of Reuters Asia, overseeing one of the company's key growth regions. Three years later he was summoned back to London to contest the succession for a new chief executive. Insiders had read it as a straight fight between the bosses of Reuters' US, European and Asian divisions. Job won, not least because he had the support of Hogg, who was deeply impressed with the way that Job had built up Reuters' Asian business. Those who worked with him there say his experience in Asia is also the key to Job's management style: unflamboyant, low-key but firm, always moving forward by consensus where possible.
The Reuters Job took over was a large and disparate group. Through the '80s and early '90s, it had grown carefully, using its cash-flow to buy up smaller competitors or move into promising new markets by snaffling other people's start-ups: Visnews, the television news film agency, Instinet, an electronic securities broking company, Finsbury Data, a business abstract publisher, IP Sharp, a price data specialist, Quotron, a securities information vendor. The problem was co-ordinating what was going on without tying local managers' hands.
Under Job, Reuters has developed a more devolved management structure, which allows local managements more freedom. The company is now split into 20 geographical areas, known as 'frontline business units', operating under three area management groups: the Americas; Asia/Pacific; and Europe, the Middle East and Africa. Two US subsidiaries - Instinet, the electronic securities broking business, and TIBCO, a California-based software specialist - are run separately. Managers are left to get on with it. Generally it works well though at times it can make the head office look rather tentative. For example, Reuters' haphazard attempts to increase its media interests - recently it burnt its fingers setting up two news radio stations in London, before hastily calling other partners in - can be ascribed to letting managers 'do their own thing'. The structure can also make senior executives' control seem a bit loose.
On the positive side, the company has set out three, clear, general objectives: to be the number one supplier to the financial community in all countries and all segments where it can sell its products profitably; to be the leading source of international news not just for established media but also the emerging new media; and to build a third global business supplying information and related technology to managers and professionals outside finance and the media. The objectives have been backed by a strategy of continuous new development in its core markets while holding down mainstream product prices. Last year it launched a new line of financial products, Reuters 3000, a screen system that packages historical data and analysis with prices and news. The products combine existing data delivery technologies with web tools and are customised for different user groups. According to analysts, who credit Job with making Reuters a much more 'customer-focused' company, it is one of the organisation's most important launches ever. So far the indications are that orders are running ahead of expectations. Reuters' golden touch seems to be working as well as ever.
But how long can it continue? The latest brokers' reports on Reuters, despite recommendations to hold or buy its shares, are relatively downbeat. The strong pound is cutting into margins, the rate of cash generation is declining, the US is proving a hard market to crack, banking consolidation and a single European currency threaten to hit the foreign exchange market, and having £1 billion sitting on deposit - as Reuters has, since it cannot find a tax-efficient way of giving it back to its shareholders - is just not a smart way of using money. Some in the City, it appears, are a little bit nervous about the future: they cannot quite work out what Reuters' margins will be and are apprehensive about the rate of change in the technology sector. In short, they see the extraordinary growth slowing down in the next few years unless the firm can find a new source of income or force through some hefty price rises.
Part of the problem, sighs one Reuters' director, is that Job is much more honest about his company's problems than other bosses, and analysts assume things must be worse than he says. But that's Job's style. The growth will continue, just not at double-digit pace, so why pretend? And the 'cash mountain', Job points out, is more of a molehill for a company that spends around £400 million a year on capital. So use the cash to expand? No, says Job. 'We tend to make small acquisitions and build organic layers on top of them. The culture or ethical base of this organisation, the mix of habit, morals and purpose, is quite demanding in itself and to dilute that across a large acquisition is not without problems.' And anyway, he adds, anyone going out to make a major acquisition from a protected position themselves, needs to think 'very carefully' about what they are doing.
Does he feel that Reuters' senior managers have a protected lifestyle? Job shrugs. 'It is a danger of an arrangement such as we have, where the Reuter Trust holds a golden share which can outvote all the others. But the trustees are not here to protect lazy and incompetent management. And they've told us that on more than one occasion.' But the arrangement is vital, he goes on, because Reuters is an unusual business, with assets that are immaterial and volatile, and its reputation for neutrality and accuracy is vital. Imagine, he says, if the company was suddenly bought by Saddam Hussein (his favourite example). 'That orchid of reputation would wilt with alarming speed. Anyone who worries about the protective element of the trust would probably have more worries about the loss of shareholder value that would result from an inappropriate change in control.'
I try another approach. Isn't the whole thrust of Reuters' business - making people pay for information - under threat from the Internet, where so much is free? No, he says coolly, the Internet has been a fantastic boost for business, offering quicker solutions (web browsers, for example) for problems which have previously seemed intractable. And as for the money side: 'Well, this idea that everything is for free is based on no economic laws that I can trace. At the moment it is free because people think that they will have income eventually.'
And has he read the Bloomberg business section in the Independent on Sunday? He looks rather taken aback at the question. Bloomberg's innovative deal with the Independent on Sunday to produce a branded business section has been seen by many as an attempt to get the company better recognised as a Reuters rival. 'No, I haven't,' says Job rather frostily. 'I should think it is fine.'
We move on to talk about his life outside work but he is clearly not very comfortable discussing it. He spends his £651,000 salary package mainly on Reuters shares, he says, and landscape pictures, which he collects. He is married, has a son and a daughter, and houses in Westminster, the Cotswolds and Spain. Most of the time Job is travelling, seeing the troops but when he is back in England he likes a country lifestyle, he says. That is what he really missed when he was working abroad. On Sundays, he can usually be found pottering in his garden. Planting a few shrubs? I ask innocently. 'Generally speaking, something like that,' he says, carefully. I wonder what on earth he needs to be cautious about there. Geoffrey Weetman, managing director, media and new business ventures at Reuters, and an old friend of Job's from his Asian days, laughs when I tell him the story. 'In many ways he is quite a private person,' says Weetman, 'until you get to know him well.'
So is Job an archetypal Reuters manager? Probably not, say others, who argue that Reuters has a real mix of styles at the top; Job simply binds them together. 'Hmm,' says Job. 'I do find it difficult to answer questions about oneself. One never stops to think about it.'
Well, what would he say are the distinctive characteristics of a good Reuters manager? 'Wow,' he says. 'Well, the world in which we operate is very high-pressure. You have to have extremely advanced antennae for working out where the explosive rate of change in various types of technology combined with the increasing openness of information is taking your product line. At the same time you have got to have an extremely good perception of the world as a place, or different parts of it. Specialists always have honour in this company but ultimately if you can master the flows of change in technology together with the flows of change in markets, you can become a very useful manager for Reuters indeed.'
He nods contentedly, pleased that he has teased out the right definition, perhaps not realising that he has also neatly summarised his own special qualities. Others might wish Reuters had a more demonstrative leader, but just look at its success. Even so, when I leave, I can't help feeling hurt that he seems relieved to see me go.
1941 - Born 13 July in Exeter
Educated Clifton College, Bristol and Exeter College, Oxford
1963 - Joined Reuters as graduate trainee. Served as correspondent in Paris, New Delhi, Kuala Lumpur and Jakarta
1969 - Assistant to general news editor in London
1971 - Assistant manager, general news, Latin America
1974 - Assistant overseas manager, Latin America, Asia-Pacific
1978 - Manager Asia, Australia and New Zealand
1981 - Overseas trading manager, London, subsequently manager, Reuters Asia
1988 - Managing director, Reuters Asia
1989 - Director of Reuters Holdings
1991 - Chief executive of Reuters, also chairman of Visnews
1994 - Non-executive director of Grand Metropolitan
WHAT PEOPLE SAY
'Peter is really strong in his feel for the business, very good at judging long-term trends, and he stands out from other chief executives in his capacity to gaze unflinchingly at the problems in the business.'
Sir Christopher Hogg, chairman of Reuters
'Peter is not in any way flamboyant. He likes to draw people out. Obviously he has spent a lot of time in Asia and his management style is meant to be based on consensus where possible. He is also a very, very thorough person with an extremely good memory and the capacity to absorb huge amounts of detail.'
Geoffrey Weetman, managing director, media and new business ventures at Reuters, and an old friend of Job from his Asian days
'Peter is really bright at thinking through where the company is going, and very change oriented. He is also extremely good with his people. He is out there and working with them, which is what they want.'
Bob Bauman, chairman of British Aerospace and a non-executive director of Reuters
'It had a reputation as a company that didn't have much awareness of customer service. Job has contributed to some obvious and conscious attempts to improve that.'